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Nancy White purchased a home and paid Conestoga Title Insurance to insure the title to her home, insurance routinely required by lenders. In a lawsuit she filed she alleges that while Conestoga submitted its rates to the Pennsylvania Insurance Department for approval, it charged title insurance fees in excess of those approved rates to homeowners who were refinancing their mortgages and entitled to a discounted "reissue" rate. She sued on behalf of herself and other borrowers in Pennsylvania, alleging that Conestoga unfairly, deceptively and systematically overcharged consumers for title insurance.

Conestoga asked to dismiss the case, arguing that the only redress White and others have is through the state agency that regulates insurance.

AARP Foundation Litigation attorneys, in conjunction with the Philadelphia Unemployment Project, filed a "friend of the court" brief in White v. Conestoga. AARP's brief points out that state consumer protection law is very clear and provides consumers the express authority to bring lawsuits to enforce their rights in court. Moreover, the brief points out, the remedy proposed by Conestoga would require each borrower to bring a claim before the agency, even though most borrowers have no way of knowing that they have been overcharged. Also, because the amount of the overcharge and therefore potentially recoverable by any one individual is so small, this kind of case that is best prosecuted as a class action, which would result in a single decision providing remedies to all consumers harmed by Conestoga in one single proceeding.

What's at Stake

The case is important because homeowners are frequently led through the settlement process with little or no information about the fees and charges imposed on them. These fees are often the source of abuse by mortgage service providers, whose superior knowledge of the system allows them to keep homeowners in the dark about their rights. Because the title agent routinely earns a percentage of the amount paid for title insurance, the incentives are for the agent to keep charges as high as possible.

Case Status

White v. Conestoga Title Ins. Co. is before the Supreme Court of Pennsylvania.

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